Ofwat investigates Anglian Water over pricing

Anglian Water is under investigation by Ofwat over claims it may have abused its position by excluding competition, leading to a potential infringement of the Competition Act 1998.

As a result, a 'statement of objections' has been issued to Anglian Water by the water regulator, which considers pricing for its Fairfields site, Milton Keynes may have caused a margin squeeze and excluded competition.

Under regulations, the ability to provide water and sewerage services to new developments is open to competition within the water and sewerage sectors. Potential new entrants are required to generally obtain 'upstream' off-site supplies from the surrounding appointed monopoly company, which in the case of the Fairfields site was Anglian.

However, at this stage Ofwat stressed that no assumption should be made there has been an infringement of competition law.

Ofwat chief executive officer Regina Finn, said: "This statement of objections is in effect a draft decision and nothing has been decided. We need to wait for the response from Anglian before coming to a final decision.

"Our role is to ensure customers get a fair deal. Harnessing market forces in the water sector is an important way of doing this. The water and sewerage sectors in England and Wales are subject to the same competition rules as any other business operating in the UK. If we find rules have been broken we will take action."

Speaking to edieWater, an Ofwat spokesperson added: "Anglian will be invited to provide representations to Ofwat, which will be taken into consideration. The action we take will depend on the result of those representations."

In response, Anglian Water told edieWater it denies any "wrongdoing and will be contesting the allegations vigorously".

An Anglian Water spokesperson, said: "Ofwat alleges an offer made to a third party who wished to supply water and sewerage services to a new development was priced in such a way that it did not allow the third party to make an adequate margin.

"We would stress the issuing of such a statement is a step in the investigation process; it does not mean that Anglian Water Services Limited has committed any infringement."

Anglian Water has 12 weeks to respond to Ofwat and a final decision will be made after Ofwat has received and reviewed this response.